BBC World Service (Hansard, 10 January 1996)

§ 14. Mr. Dowd
To ask the Secretary of State for Foreign and Commonwealth Affairs what estimates have been made of the effects on the operating budget of the BBC World Service of the combined effect of the recent reduction in its capital programme and the proposed introduction of private finance initiative funding. [6851]

§ Mr. Hanley
The effect of the PFI funding on the World Service budget will be clearer once the World Service completes its discussions with the private sector.

§ Mr. Dowd
Does the Minister regret the damage that the Government's arbitrary decision to cut both the operating budget and the capital budget of the World Service—in outright defiance of the triennium agreement—has done to its ability to plan for the future? Does he not realise that that will produce total cuts, in real terms, across the World Service's budgets of some £20 million by 1997–98? Does that not conclusively demonstrate that the Government's word is not to be trusted even when they are dealing with an institution such as the BBC World Service, which provides value to the people of Britain that far exceeds its operating costs?

§ Mr. Hanley
I fully recognise the great value and high quality of the World Service and the important role that it plays in overseas representation. It is not realistic, however, to examine the World Service budget in isolation from the Foreign Office budget as a whole, as the chairman of the BBC has acknowledged.
We have done everything possible to keep reductions in the World Service to the minimum. If one takes both capital and revenue reductions, the average is 4.75 per cent for the World Service while it is 7.0 per cent. for the Foreign Office as a whole. If one takes expenditure for 1996–97, the current expenditure reduction for the World Service is 0 per cent., whereas for the diplomatic wing of the Foreign Office it is 4 per cent. If one takes capital expenditure into account as well, as we said, the PFI will be playing its part.
The Government have favoured the World Service above every other part of the Foreign Office in the current expenditure round.

§ Mr. Jopling
Will the Minister bear it in mind that recently the BBC seemed sensibly to opt out of paying the huge sums of money required for prestige sporting events? We shall now, for example, be able to watch formula 1 motor racing on ITV—which allegedly paid £70 million over five years for that right—rather than on the BBC. Does not all that add up to the fact that the BBC should have ample savings with which to make up the shortfall for the World Service?

§ Mr. Hanley
I cannot go along with the argument that my right hon. Friend uses inasmuch as I believe that the World Service, along with the BBC as a whole, has become much more efficient than it was in the past. The World Service has also produced television services the 202 world over at no cost to the British taxpayer, which is a great triumph, and the quality of those programmes is improving daily.
I believe in the investment that we have made in the World Service. It has a capital provision of more than £62 million for the next three years, and expenditure on the Oman relay station will cost £20 million during that period. That is a substantial capital investment. With further efficiency savings, I believe that the World Service will continue to serve us extremely well. On top of that, real terms funding has been increased by 50 per cent. since 1979.

§ Mr. Shore
The Minister must be aware that the BBC itself does not finance the World Service; it is financed by subventions from the Foreign Office, and always has been. Will the Minister therefore look more carefully now at the case for sustaining the previously budgeted expenditure, not only for this year but for 1997–98? There is a real danger not only that the capital budget will be cut—that will happen anyway and the World Service may or may not be able to make up for it through the PFI—but that the operating budget will be cut. Those of us who heard earlier this year of the end of our 50-year-old radio service to France, which has operated since General de Gaulle first came to Britain in 1940, can only look to the future with great anxiety and wait to see which other services are in danger.

§ Mr. Hanley
I recognise that some hon. Members have longer memories than others, and can therefore remember the time when the French language service was extremely important. However, the World Service's decision to cut that service has nothing to do with the recent budgetary measures. The decision was taken by the BBC purely on its own merits, and was announced last September. If the right hon. Gentleman wants to fund nostalgia, that is up to him, but the World Service is efficient and effective. I recognise the £10 million funding gap—[Interruption.] If Opposition Members take some interest in the subject, they might like to listen to the answer. I am talking about the funding gap in 1997–98. The prediction of that gap is based on several assumptions that remain to be verified. I realise that it will be a difficult year, but I am confident that much can be done to absorb the cuts, especially through further efficiencies.

§ Sir Patrick Cormack
Does my right hon. Friend accept that the BBC World Service acts as a most effective, and cost-effective, ambassador in every home and institution in which it is listened to? Bearing that fact in mind, will he carefully re-examine the figures, especially those for 1997, to ensure that the World Service is not jeopardised for the sake of the price of a mile of motorway?

§ Mr. Hanley
I can tell my hon. Friend, and I know that he will agree, that the Government have a strong record of support for the World Service. As I said earlier, real terms funding is up by 50 per cent. since 1979. World Service output and audiences now stand at record levels—the audience is more than twice the size of the nearest competitor. The World Service has benefited from an investment of £166 million since 1991, which has greatly improved audibility and efficiency. For example, a new £29 million relay station is nearing completion in Thailand. The World Service is now broadcast in 42 languages, including the 24-hour English output, and 203 it is rebroadcast by more than 900 local radio stations. That is a record of success. [Interruption.] No wonder the Opposition are angry about it.

§ Mr. Robin Cook
If the World Service is such a success, why are the Government not backing that success? The Minister has just mentioned the 42 languages. Does he not know that this month the World Service is carrying out a review to decide which of those languages it will have to drop in 1997? Which language does the Minister think that the BBC World Service could drop without damaging British influence? If he cannot answer that question, does that not underline how short-sighted it is to cut the funding of one of the great assets of Britain, which should be one of the best investments that the Foreign and Commonwealth Office could make in foreign relations?

§ Mr. Hanley
I said earlier, and I shall repeat it, that the World Service has done better out of the Foreign and Commonwealth Office public expenditure survey than any other branch. Indeed, the rest of the Foreign Office has had to make sacrifices because of the World Service. Does the hon. Gentleman want to say how much he would spend on the Foreign Office budget and how much extra on the World Service? What allocation would he make for the Foreign Office budget under his Government, if he ever had the chance to form one? I should be interested if he would put the numbers on the line, because we want to know how much extra he would spend.

§ Mr. Temple-Morris
Does my right hon. Friend accept that, as has already been made clear, it is a matter of major concern on both sides of the House that the operating budget of the BBC World Service for the next triennium is under serious threat? He has waxed eloquent about the achievements of the BBC World Service. As he has the Foreign Office responsibility for that service, will he undertake to protect it, rather than cutting an operation that delivers more for Britain at less cost than almost anything else?

§ Mr. Hanley
My hon. Friend's interest in, and support for, the World Service is well known. I am grateful for the discussions that he had with me on the subject before Christmas. As I said, we have protected the World Service from the rigours of the Foreign and Commonwealth Office budget for the coming year. We have favoured it, and to a large extent ring-fenced it, in comparison with expenditure on the British Council, on the diplomatic wing and even on the Overseas Development Administration. In other words, the World Service has done better than any other part of the Foreign and Commonwealth Office in funding. That is a recognition of the importance that the World Service holds for the United Kingdom and of the way in which the House regards it.